Refundable dividend tax on hand (RDTOH) is an account that tracks refundable corporate tax paid on a private corporation's investment income — both Part I tax on aggregate investment income and Part IV tax on certain dividends from non-connected corporations. The balance is refunded to the corporation when it pays a taxable dividend to its shareholders.
RDTOH implements the integration principle, which aims to tax investment income earned through a corporation at roughly the same overall rate as if the shareholder had earned it directly. Since 2019, the account is split into eligible and non-eligible pools, and the type of dividend paid determines which pool is refunded. Tracking RDTOH correctly is important to recovering the refundable tax and to choosing the right kind of dividend.